Enhanced due diligence is a crucial component of AML compliance for companies that handle transactions of high value and/or customers who are at risk of money laundering and other financial crimes. It’s used to weed out the riskiest of clients and prevent them from donating to terrorist organizations as well as other criminal groups.

The EDD process is more thorough than regular due diligence and involves a wider range checks. This includes collecting more identification documents, as well as conducting thorough checks of a customer’s whereabouts and sources of funds. This kind of due diligence is usually used for high-risk customers such as politically exposed individuals (PEPs), people who are in high-risk countries and also for businesses or individuals which are cash-intensive.

The EDD process should be more thorough the more complex a warpseq.com click here for tech insights person legal entity, or transaction is. Regulators typically prefer a risk-based method that uses documented risk assessment policies in order to determine the amount of scrutiny required for each case. The EDD procedure also requires more comprehensive information, including information about the person’s customers, suppliers and corporate/legal structures. EDD procedures are typically more expensive, time-consuming and require a higher level of documentation as compared to CDD procedures. It’s important to have an identity verification system that’s both effective and efficient, such as 1Kosmos’ BlockID, to make the process more efficient for your company.

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